last year’s immigration policy, repackaged

The 2025 federal budget has arrived, and sandwiched in the 493-page document is the 2026-2028 Immigration Levels Plan—an update to the government’s immigration policy for the next three years.

Aside from a few adjustments, the latest plan is more or less a continuation of last year’s plan. While that may not sound newsworthy, the implications are actually quite profound. By maintaining its existing policy, the government has effectively recommitted Canada to multiple years of population decline—something this country has never once experienced, through world wars or pandemics, since Confederation in 1867. What’s more, the impacts of this commitment will not be felt evenly across the provinces.

Reflecting briefly on last year’s policy update (the 2025-2027 Immigration Levels Plan), recall that the government announced significant cuts to its annual permanent resident targets, from around 500,000 per year to the high-300,000s. Additionally, and for the first time ever, targets were also set for non-permanent residents (a group that includes international students, temporary foreign workers, and asylum seekers). This was a response to unchecked admissions over the prior three years, which helped drive population growth to record levels following the Covid-19 pandemic. 

Indeed, from the beginning of 2022 to mid-2024, the country added over 1.7 million non-permanent residents on a net basis, more than total net additions over the previous five decades. (Yes, you read that correctly.) The then-new targets sought to unwind much of that increase by reducing the share of non-permanent residents living in Canada to 5% of the population (from 7.6%) by the end of 2026. At the time, it was estimated that the result would be net outflows of almost 450,000 non-permanent residents in both 2025 and 2026.

The most recent policy update essentially maintains the permanent resident targets set last year, with the annual intake goal pegged at 380,000 admissions for each of 2026 and 2027, and extended to 2028. Layered into this is the target that the share of economic migrants will increase from 59% to 64% to better align permanent immigration with labour market and economic needs. 

New to this year’s plan, the government announced a one-time initiative to recognize 115,000 protected persons as permanent residents over the next two years. These permanent resident admissions are in addition to the annual targets of 380,000 mentioned above. However, it’s important to note that because these protected persons are already living in Canada, the direct impact on population growth of their conversion to permanent residents will be nil. Similarly, the government also stated its intention to accelerate the transition of up to 33,000 temporary foreign workers to permanent residency in 2026 and 2027, which will also be over and above the headline target. 

As for non-permanent residents, the federal government has essentially maintained last year’s targets, too—with a few caveats. Garnering the most media attention has been the topline cuts to new permit issuances, from 673,650 in 2025 to 385,000 in 2026, and 370,000 in each of 2027 and 2028 (this includes all international student and worker arrivals). Within that, targets for new student permits have been cut the most, from 305,900 in 2025 to around 150,000 in each of the next three years. 

While these reductions are indeed significant, they’re not entirely surprising given the otherwise enormous magnitude of non-permanent resident outflows that will be required to meet the 5% target. In fact, given the relatively meager progress that’s been made to-date on reducing the stock of non-permanent residents (at least as it relates to the government’s target), these cuts would have needed to be much larger had the government not chosen to extend the timeline of its 5% target. Per the updated plan, the government is aiming to reduce the stock of non-permanent residents to 5% of the national population by the end of 2027—an additional year when compared to last year’s plan.

Figure 1 highlights the evolution in Canada’s non-permanent resident population to-date and what it will take to meet the revised 5% target. Since peaking at 3.15 million people in Q3 2024, the number of non-permanent residents in Canada has only declined by 125,000 through the middle of 2025, for an average of 42,000 per quarter since the peak. This has brought their share of the national population down marginally, from 7.6% to 7.3%. Leveraging rennie’s in-house population models, we estimate that meeting the 5% target by the end of 2027 would require additional net outflows of approximately 950,000 non-permanent residents over the next 10 quarters, equivalent to 95,000 per quarter. Therefore, even with an extra year to meet the 5% target, the pace of outflow will have to more than double from what has heretofore been an unprecedented outflow over the past three quarters.

from historic lows, to historic lows?

Despite little progress having been made thus far in reducing the number of non-permanent residents in Canada, the net outflows experienced to-date have already led to a dramatic deceleration in Canada’s population growth. The national population reached 41.65 million on July 1st of this year, a net increase of just 47,100 people in the second quarter. This stands in sharp contrast to growth of 272,000 people in Q2 2024, 321,800 in Q2 2023, and 257,100 in Q2 2022. In total, Canada added 77,100 people through the first half of 2025, which, as figure 2 shows, marks the fewest net additions in the first six months of any year in available data back to 1947. Over the past roughly eight decades, national population growth has averaged nearly 196,000 in the first half of the year.

While tighter immigration policy has weighed on growth across Canada, figure 3 highlights the considerable disparities across regions. Most notably, BC actually saw its population decline by 2,453 people in the first half of 2025—the first recorded decrease among comparable periods—and was the only province in the country to register such a decline. Meanwhile, neighbouring Alberta saw its population grow by 41,165 in six months, more than the combined total of the rest of Canada. The Prairie provinces, Atlantic Canada, and Quebec all saw modest growth in the 9,500-to-15,000-person range, while Ontario—Canada’s largest province—added just 2,710 people. The Territories saw the smallest growth of any region in absolute terms (552) but were the second-fastest growing region in percentage terms after Alberta (+0.4%).

Looking more closely at the components of population change, BC’s population decline was driven primarily by a net outflow of 22,701 non-permanent residents in the first half of the year, which was only partially offset by net immigration of 19,966 and net interprovincial in-migration of 444 (meanwhile, the 162 more deaths than births represented a marginal drag). Similarly, growth in Ontario was weighed down by a net outflow of 71,698 non-permanent residents, as well as net interprovincial out-migration of 11,474. 

In contrast, non-permanent resident outflows were much less significant across the rest of Canada. The total net outflow across the other eight provinces and three territories, at 19,514, was less than the total from BC alone. Much higher concentrations of non-permanent residents in BC and Ontario explains why last year’s change in immigration policy has impacted them the most. At their peak in Q3 2024, non-permanent residents accounted for more than 9% of the population in each of these provinces.

As a result of the slower-than-expected progress made in reducing the non-permanent resident population, as well as the extension of the 5% target by one year, rennie intelligence is now forecasting modest population growth nationally in 2025 (from a decline previously), followed by two years of net losses (in 2026 and 2027). All told, the country is projected to expand by about 115,000 people in full-year 2025, followed by shrinkage of nearly 90,000 in each of 2026 and 2027, returning to growth of approximately 350,000 per year thereafter. 

As noted in the opening to this piece, should the immigration policies of the day play out as designed, Canada may be headed for its first decline in population in the nation’s history. The effects of this policy shift (or extension, depending on how you want to look at it), as manifested by actual population data through the first half of 2025, won’t be spread evenly across the country, either. Both BC and Ontario will continue to see outsized downward pressure on their populations. By recommitting to last year’s sharp shift in immigration policy, the federal government has ensured that the historic pace of change witnessed this year will continue to be a dominant feature of Canada’s demographic landscape.